2025 Study: Industry Faces Challenges Educating Consumers on Life Insurance Costs

The 2025 Insurance Barometer Study by LIMRA and Life Happens highlights significant challenges and opportunities for the life insurance industry, focusing on consumer education gaps and cost misconceptions. It reveals that 41% of Americans feel only somewhat or not knowledgeable about life insurance, especially younger adults aged 25 to 35, who tend to overestimate coverage costs by eight to twelve times. This cost misperception creates a barrier to purchasing policies despite life insurance being more affordable than commonly believed.

Research indicates younger consumers often rely on social media platforms like TikTok, Instagram, and podcasts for financial information. However, these sources often feature unlicensed influencers lacking regulatory oversight, which complicates accurate dissemination of life insurance knowledge. The industry faces challenges in competing for consumers' attention in these crowded digital spaces.

To address misinformation and increase coverage uptake, industry experts suggest launching targeted educational campaigns emphasizing the distinctive benefits of life insurance compared to other financial tools such as cryptocurrencies or retirement accounts. Simplified messaging and storytelling can help convey the importance of securing life insurance early while individuals are healthy to maximize value.

Licensed insurance agents remain critical in bridging the knowledge gap by providing trusted, personalized guidance to consumers navigating life insurance options. Enhancing agent-led education and leveraging multi-platform digital outreach could help convert interest into effective policy purchases. Overall, improving consumer understanding is seen as key to expanding life insurance participation and ensuring long-term market growth.